Blaming the COVID-19 pandemic for putting it in a tough financial position, Hamilton Township announced June 5 that it had furloughed all of its employees earning less than $65,000 per year.
The affected employees will be furloughed two days per week—or 40 percent—for the next nine weeks. Furloughed employees will continue to receive health insurance and pension credits. The township said union members “overwhelmingly” approved the plan in late May.
Meanwhile, employees making more than $65,000 are not affected.
The administration said it picked the $65,000 figure because, by its calculations, workers with earnings less than that would be able to recoup their lost wages—or more—on unemployment benefits. This is due to a provision in the federal government’s pandemic relief package that provides a $600 check weekly to any worker qualifying for even one dollar of state unemployment benefits. Funding for the $600 federal checks expires on July 31, the same day the township’s furloughs end.
The township estimates its workers will receive a total of $800,000 in federal unemployment benefits over the course of nine weeks. Based on those numbers, simple math shows that approximately 148 township employees are affected by the furloughs. The township did not say how many of its workers it had furloughed.
The township did say the furloughs will save it approximately $500,000 over the next two months, allowing it to avoid laying off any employees.
The furloughs come at a vital time for Mayor Jeff Martin, who introduces his first municipal budget later this month. Martin’s administration had been preparing residents for financial pain even before the COVID-19 pandemic hit, saying Kelly Yaede’s outgoing administration had left the township with a range of budget issues. The pandemic has furthered the problems, the township says, with decreasing municipal revenues and “a significant budgetary hole.”
In order to fill the gaps, Hamilton has already reduced the funding for overtime pay in the police department budget and raised sewer rates, as well as borrowed $4.1 million in cash from neighboring Robbinsville Township.
“This is obviously not something that we wanted to do, but it is a necessary step to ensure that we are in a solid financial position heading into 2021,” Martin said in a press release. “The provisions of the agreement will allow our employees to collect payments without losing any income.”
“I sincerely thank our collective bargaining unions for their continued partnership and understanding of shared sacrifices during these uncertain times. I also want to thank the residents in advance for their understanding as this may result in a temporary disruption in services.”
Uniformed police officers, emergency dispatchers, and employees of the township’s Department of Water Pollution Control are exempt from the furlough, which began on June 1.